St James’s Place wants to be known as a face-to-face financial planning firm. It certainly doesn’t want to be known as an investment manager – after all, it outsources that bit of the operation through segregated mandates.
But what about the third pillar of the financial planning chain, the platform? That’s often overlooked when it comes to SJP, but its Bluedoor technology could come to play an increasingly important role as it fights to show ongoing advice clients are actually getting what they paid for.
Ongoing battles
On 28 February, SJP hit the headlines after it set aside some £426m to cover potential refunds for clients it couldn’t prove got annual service for their advice fees. But its platform journey starts much earlier. In 2019, after a two-year process, SJP ‘successfully migrated’ its customer accounts onto SS&C Bluedoor and Percana Insurance solutions from a legacy application.
A whopping £69bn moved across, taking SJP’s total on the platform to over £100bn. A year later, the contract with SS&C was extended again for another five years. Fast forward to 2024, and that work on the technology still isn’t finished. Five years later, and SJP is still spending tens of millions on it.
Financial results for 2023, also published on 28 February, show SJP is still in the process of migrating its offshore business onto the platform, at a cost of some £30m. Old Mutual spent £450m on Bluedoor before it threw in the towel and switched to FNZ. SJP has spent at least £610m since 2014, but doesn’t appear to have any designs on taking the platform back in-house; the current contract runs until 2034.
“Fortunately they can afford it and when it all falls over it’ll slow down the outflows too,” was one market watcher’s verdict when I posed the question on what role the platform was playing. SJP says the bill “is more than offset by the lower tariff charges on Bluedoor compared to the previous system, which grew as the business grew”.
But the bill comes despite the fact that, in reality, the technology operates more like an administrative tool than a full-fat platform. Bluedoor gives SJP clients “a consolidated view across all pensions and savings products” and SJP partners access to SS&C’s pension and actuarial services illustrations system.
Show me the money
SJP’s results refer to Bluedoor as an administration platform. But whatever the technology is called, it could prove key to helping its advisers prove their ongoing planning credentials. In a LinkedIn post on 4 March, SJP said it was “strengthening our approach to evidencing ongoing servicing. A key element would be deploying technology to better track and record the service provided to clients,” it added, promising a “deeper look” at the issue.
Chief executive Mark Fitzpatrick said the advice giant was “reviewing our records to ensure clients received the services from their adviser that they paid for” and “if for some reason they didn’t, or we can’t find evidence that they did, we’re going to refund the ongoing servicing charges”.
Presumably this could all link with adviser records on Bluedoor in some way, if it doesn’t already.
But another advice veteran said old-school platform technology will be a major issue for many national firms and consolidators when it comes to proving ongoing advice, describing many as still keeping client reviews in the equivalent of a “filing cabinet”, particularly when it comes to low-value customers.
What’s clear is that if it sorts all of its tech stack out, SJP is less likely to run into ongoing servicing issues in the future. Its back office was also previously an issue: “the assessment revealed our evidence of ongoing client servicing was less complete in the years preceding investment into our Salesforce CRM system in 2021,” the firm said on the day.
We’ll have to see if yet another £30m spent on Bluedoor can help with what comes next.
Photo by Grant Durr on Unsplash
